Podcast Ep 187: Tech veteran and Storm Technology CEO Karl Flannery says Irish firms are to spend on average over €400k on AI this year.
Karl Flannery from Storm technology has seen it all from the early days of PCs in the workplace to the cloud and apps and right up to today where a whole new storm is about to be unleashed in the form of artificial intelligence. Our work and our personal lives may never be the same again.
But you definitely get the sense that this particular evolution of technology – the dawn of AI – has him most excited. In many ways technology is moving from something portrayed in science fiction to an operational reality in many businesses. Karl Flannery isn’t just witnessing it, he is embracing the storm. Simply put, the modern workplace continues to evolve with AI coming ever more to the fore.
“It’s not a vision anymore. It’s becoming something that we’re starting to operationalise within our businesses”
A recent TechCentral survey commissioned by Storm Technology found that 63% of businesses in Ireland plan to increase AI spend in 2024. According to the 100 senior Irish IT leaders surveyed, they expect to spend on average €436,000 each this year on AI, which indicates a significant increase of 45% compared to the average estimated spend of €301,700 in 2023.
Embracing the AI storm
Driving this, 59% of IT leaders think their company needs to adopt AI to be competitive over the next three years and 46% of respondents believe their organisation will lose market share/competitive advantage in the next three years if they do not invest effectively in AI.
However, not everyone is bought into the trend with almost half (49%) of IT leaders saying their senior management does not fully understand the potential of AI. Despite this, some three quarters (75%) of organisations in Ireland are considering or already using AI to some degree.
Delving deeper into this, less than a quarter (24%) are using it in a limited manner with a clear strategy. Meanwhile, some 15% of enterprises are using AI for certain business areas but without a clear strategy.
Flannery, who founded Storm Technology, one of Ireland’s longest surviving indigenous tech firms and a close partner with Microsoft, has seen it all before. His logic: If Irish organisations truly want to capitalise on the potential that AI offers, they need to deploy not just the solutions that fit their business needs, but also build out the processes and protocols to effectively and ethically manage it – thus establishing trust with staff, customers and suppliers.
In this way he believes companies can driving innovation and growth by helping staff to be more productive, enhance creativity and deliver better customer experiences.
For Flannery, it has always been about empowering the knowledge worker.
“And that’s the direction is taking. It’s the transformation or journey we’ve been on to move everything into the cloud. You can orchestrate all the technology and bring it together. We are now starting to realise the vision that we’ve talked about for my career, providing in a sense of looks and like feels like a single operating digital operating platform for an enterprise. That’s where we’re getting to now. And the capability is there to pull that together for clients.
“We’re seeing the agility coming from technologies, like low code or no code environments as well, because a lot of businesses have a lot of tiny processes – edge case solutions that they’ve got running on spreadsheets are some older technology –which cannot be put together on a single platform, but still operate to deal with those edge case issues within the business or processes.
“So from the knowledge worker dealing with the unstructured content, right through to digital processes including handling the waste from the business in the circular economy – all of those systems can now be considered on a single digital operating platform, where it’s getting easier and easier to integrate this stuff together. And this is the journey we’re on. And, and you’re seeing this with technologies like AI and particularly generative AI being overlaid on top of all this, to allow the knowledge workers within the enterprise to gain further insights and generate new content and provide one off responses to situations or issues that are occurring within their business and this the type of stuff we’re working on now. And it’s not a vision anymore. It’s becoming something that we’re starting to operationalise within our businesses.
A physicist by education, Flannery started Storm in 1995. He was working as a tech consultant for Digital Equipment Corporation in Galway and the general manager suggested he and some other consultants form a business in order to win bigger contracts, especially in the pharma sector.
This led to Storm landing a major contract from Digital’s HQ to lead a project to enable fraud detection for calling cards. “The system cost them $300,000 but it saved them around $3m in the first month alone. That got us going and kicked off the company.”
Because Flannery and his colleagues were now viewed as a business rather than a collective of consultants they had to go and hunt for business. “Digital were very good to us but we couldn’t expect them to keep handing out contracts. We were lucky in a way that this forced us to get contracts from other businesses in the region such as ThermoKing and Nortel.
“Because we worked with these large organisations, we learned how you operate a business rather than just being a technical person within an organisation.”
The accidental CEO
Pivotal lessons in how to survive, how to build a team, how to build relationships with clients came hard and fast.
Like many tech service companies, there was a lingering ambition to build their own products and efforts to create a product for the manufacturing sector in the late 1990s taught Flannery harsh lessons. “We did two thigs that were wrong. First, because we were engineers and perfectionists we over-engineered the product and it took too long to develop. The second mistake was that because it took so long to develop it was expensive.”
The onset of the dot-com bubble bursting in 2000 led to an overall collapse in IT spending and young businesses like Storm were in a fight for survival. It was a case of either embrace the storm or disappear.
Flannery’s response was instinctive. “I ended up getting more and more involved with the business rather than just being a technologist in the business. We had to right-size the company at the time. We had to disband the product development team and we focused on the services side of the business. We got by with the skin of our teeth and I ended up being the accidental CEO of the company at the time. We had to make decisions around how to downsize and who would stay and go. It was a hard and unenviable situation.
While harsh lessons brought clarity to Flannery’s understanding of running a business, Storm was still in the right place at the right time, evolving into a business with operations in both Galway and Dublin as technology became more ingrained in our working lives.
The timing was interesting because out of the ashes of the tech industry at the time came new technologies from broadband to the cloud and eventually smartphones and apps, making every worker a knowledge worker.
What fascinates Flannery is the unintended consequences of technology. “When the TV was invented everyone thought it would be used solely for education. The World Wide Web has evolved into social media and the way we connect today, how we book flights, how we shop and how we work remotely. What people don’t see coming is how deeply these things become a part of our lives.
“We couldn’t have predicted the positive impact or the negative impacts these technologies have had on society. We can never predict how it is going to be used, such as for disinformation which is causing the polarization and fragmentation of society. While most of this has been fantastic we need to be very aware of the consequences.
“So when you talk about the future of AI, I think we can see the super advantages of what’s coming, particularly with generative AI. But we also have no idea what the consequences are going to be in terms of risk, bias, disinformation.”
Despite this Flannery comes across as optimistic, especially for how technologies like AI will augment knowledge workers. “The journey we’ve been on has been absolutely fantastic.”